Behind a row of sealed red incubator doors in a new facility in northern China, about 400,000 chicks are hatched every day, part of the rapidly modernising supply chain in China's $37 billion egg industry, the world's biggest. As China overhauls production of
everything from pork to milk and vegetables, farmers raising hens for eggs are also shifting from backyards to factory farms, where modern standardised processes are expected to raise quality and safety.

That's an important step in a country where melamine-tainted eggs and eggs with high antibiotic residues have featured in a series of food safety scandals in recent years. It is also spurring demand for higher priced branded eggs over those sold loose in fresh
produce markets, reports Reuters.

"These days if you're a small farmer, your eggs won't get into the supermarkets," said Yuan Song, analyst with China-America Commodity Data Analytics.

Tough new regulations on treating manure and reducing the environmental impact from farms have also pushed many small farmers out.

Most egg producers now have between 20,000 and 50,000 hens, said Yuan, a significant change even from two years ago. The remainder with less than 10,000 birds are likely to be shut down soon as local governments favour larger producers that can be
more easily scrutinised.

Those rapid changes are driving investments like the 150 million yuan ($22.60 million) hatchery in Handan, about 400km (250 miles) southwest of Beijing.

The highly automated plant, owned by a joint venture between China's Huayu Agricultural Science and Technology Co Ltd and EW Group's genetics business Hy-Line International, is the world's biggest hatchery of layer chicks, or birds raised to produce eggs
rather than meat.

By producing 200,000 females a day, or around 60 million layers a year (one day a week is for cleaning), it can meet demand from larger farms who want to buy day-old-chicks in one batch, said Jonathan Cade, president of Hy-Line International, based in
West Des Moines, Iowa.

A woman inspects eggs for cracks at the Huayu hatchery in Handan, Hebei province, China, June 25, 2018. Picture taken June 25, 2018. REUTERS/Thomas Peter
"That's the best way to start off with good biosecurity," he said. When the birds on one farm are the same age, they are less likely to spread disease.

Imported, latest-generation equipment helps speed up the throughput of the hatchery. An automatic grading machine, which can handle 60,000 eggs an hour, sorts eggs into two acceptable sizes before they enter incubators - uniform eggs produce similar sized
chicks that will have the same feeding ability.

Once hatched, female chicks go to automated beak-clipping machines that process around 3,500 an hour.